Things had looked bleak for the Glasgow side as the match entered the final ten minutes. Panathinaikos had taken the lead early on thanks to a stunning strike from Ionnis Goumas and stayed in control of the game for much of the 90 minutes.
But the introduction of second-half substitute Chris Burke helped set up Novo for the strike which handed them a likely meeting with Werder Bremen.
Rangers seemed to settle in well despite the backdrop of a vociferous and partisan Greek crowd in the Apostolos Nikolaidis Stadium. Kris Boyd sent a 22-yard effort just wide of the right-hand post in the opening minutes.
But things quickly turned the way of Pana as they took control of the match. Their assault on the Rangers goal started with an Ivan Ivanschitz effort with went just past the upright and with the Rangers defence still reeling Goumas gave the Greeks the lead.
In a single move Goumas turned and blasted a perfect shot from 25 yards over Allan McGregor who was slightly off his line.
But for McGregor Rangers would have gone further behind soon after the opener as Goumas saw his second effort turned around the post by the visiting keeper.
Carlos Cuellar got back well to make a goal-saving clearance as Helder Postiga drove forward.
The visitors began to put the pressure on Pana as the interval approached. Charlie Adam saw his effort cleared off the line by Mikael Nilsson, while Novo has his effort touched over the crossbar after good play by Sasa Papac set up the chance.
Rangers again made a positive start to the second half with Papac forcing a good save from Mario Galinovic after less than two minutes.
Panathinaikos could not reassert the dominance that they had shown in the first half, but the Gers were not showing themselves to be a real threat to the home goal.
Midway through the half Postiga was replaced by Dame N'Doye and he immediately made an impact, sending an effort just wide of McGregor's goal.
And Rangers substitute Christian Dailly proved his worth shortly after his introduction, making a last-ditch tackle to stop a Dimitrios Salpigidis shot.
Just as all looked to be lost for the Scots, Novo scored his 14th European goal to send Rangers into the next round.
After brilliant attacking play from Burke, he made the most of a deflection off Nasief Morris to slam the ball home from eight yards.